By Biman Mukherji 
 

Oil prices rose in Asia on Tuesday, despite receding hopes of a coordinated production cut between major oil producers.

A Sunday meeting between Saudi Arabia and Venezuela ended without any plans for production cuts, damaging hopes that the world's major exporters will cooperate on output cuts.

Still, even the discussions of production cuts were seen as mildly positive.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $30.09 a barrel at 0350 GMT, up 40 cents in the Globex electronic session. April Brent crude on London's ICE Futures exchange rose 20 cents to $33.08 a barrel.

Overnight weakness in the dollar also supported crude oil amid thin trading in Asia due to the Lunar New Year holiday.

"I think the likelihood of a coordinated supply cut is highly unlikely," said Daniel Hynes, senior analyst at ANZ Bank.

He said supplies of crude oil are likely to only increase in the near term with the animosity between Iran and Saudi Arabia preventing the two nations from coordinating their supplies.

"We are certainly forecasting prices to weaken to $28 per barrel," said Mr. Hynes, adding that the market was reaching a point where U.S. oil production starts to shut down either because of companies going bust or oil wells drying up as drilling becomes too expensive.

He added that prices could rebound near the end of the year as supplies tighten.

Oil companies have been cutting back, but their efficiency keeps improving. Oil production per working rig keeps hitting new highs, according to an ANZ Bank report. U.S. oil production has kept stable around 9.2 million barrel a day in recent months, despite the fall in drilling.

 

Write to Biman Mukherji at biman.mukherji@dowjones.com

 

(END) Dow Jones Newswires

February 08, 2016 23:47 ET (04:47 GMT)

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